Exhibit 10.2
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated January 19, 2009 is made
by and between AngioDynamics, Inc., a Delaware corporation (the
"Company"), and Jan Keltjens (the "Executive").
WHEREAS,
the Company considers it essential to the best interests of its
shareholders to foster the continued employment of key management
personnel; and
WHEREAS,
the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its shareholders; and
WHEREAS,
the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a Change in Control;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1.
Defined Terms . The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.
2.
Term of Agreement . The Term of this Agreement shall
commence on the date hereof and shall continue in effect through
December 31, 2009; provided, however, that effective January 1,
2010 and each January 1 thereafter, the Term that is then in effect
shall automatically be extended for one additional year unless the
Company has given notice before the January 1 in question that the
Term that is in effect at the time such notice is given will not be
extended; and further provided, however, that if a Change in
Control occurs during the Term, the Term shall expire no earlier
than twelve (12) calendar months after the calendar month in which
such Change in Control occurs. Notwithstanding the foregoing, this Agreement shall
terminate if the Executive ceases to be an employee of the Company
and its subsidiaries for any reason prior to a Change in
Control. However, anything in this Agreement (including the
preceding sentence) to the contrary notwithstanding, i f a
Change in Control occurs and if, within three months prior to the
date on which such Change in Control occurs, the Executive's
employment with the Company is terminated by the Company without
Cause or an event occurs that would, if it took place after the
Change in Control, constitute Good Reason for termination of
employment by the Executive, and if it is reasonably demonstrated
by the Executive that such termination of employment by the Company
or event constituting Good Reason for termination of employment by
the Executive (a) was undertaken at the request of a third party
who has taken steps reasonably calculated to effect the Change in
Control, or (b)
otherwise arose in connection with or in
anticipation of the Change in Control, then for purposes of this
Agreement such termination of employment by the Company without
Cause or event constituting Good Reason shall be deemed to occur
during the 12 month period following the Change in Control and, if
the Executive terminates his employment for such Good Reason before
the Change in Control, such termination of employment by the
Executive shall likewise be deemed to occur during the 12 month
period following the Change in Control.
3.
Company's Covenants Summarized . In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's covenants set forth in Section 4
hereof, the Company agrees, under the conditions described herein,
to pay the Executive the Severance Payments and
the other payments and benefits described
herein. Except as provided in Section 2, Section 6.3, Section 9.1
or Section 14.2 hereof, no amounts shall be payable under this
Agreement unless the Executive's employment with the Company
terminates following a Change in Control and during the Term. This
Agreement shall not be construed as creating an express or implied
contract of employment enforceable against the Company nor, except
as provided in Section 4 below, enforceable against the Executive,
and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be
retained in the employ of the Company.
4.
The Executive's Covenants . The Executive agrees to remain
in the employ of the Company, subject to the terms and conditions
of this Agreement, if a Potential Change in Control occurs during
the Term and the Executive is then in the employ of the Company,
until the earliest of (a) the date which is six (6) months from the
date of such Potential Change in Control, (b) the date of a Change
in Control, (c) the date of termination by the Executive of the
Executive's employment for Good Reason or by reason of death,
Disability or Retirement, or (d) the termination by the Company of
the Executive's employment for any reason; provided that
Executive’s agreement to remain in the employ of the Company
shall be subject to the condition that no adverse change occurs
after the Potential Change in Control in his title, duties,
responsibilities, authority, reporting relationships, compensation,
benefits or indemnification rights.
5.
Certain Compensation Other Than Severance Payments .
5.1 If
the Executive's employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay the Executive his full salary through the date of
termination at the rate in effect immediately prior to the date of
termination or, if higher, the rate in effect immediately prior to
the first occurrence of an event or circumstance constituting Good
Reason, together with all compensation and benefits payable to the
Executive through the date of termination under the terms of the
Company's compensation and benefit plans, programs and arrangements
as in effect immediately prior to the date of termination or, if
more favorable to the Executive, as in effect immediately prior to
the first occurrence of an event or circumstance constituting Good
Reason.
5.2 Subject
to Section 6.1 hereof, if the Executive's employment shall be
terminated for any reason following a Change in Control and during
the Term, the
Company shall pay to the Executive the
Executive's normal post-termination compensation and benefits as
such payments become due. Any such post-termination compensation
and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation
and benefit plans, programs and arrangements as in effect
immediately prior to the date of termination or, if more favorable
to the Executive, as in effect immediately prior to the occurrence
of the first event or circumstance constituting Good Reason.
6.
Severance Payments; Excise Tax .
6.1 Subject
to Section 6.2 and Section 6.3 hereof, if the Executive's
employment is terminated following a Change in Control and during
the Term either by the Company or by the Executive, other than (a)
by the Company for Cause, (b) by reason of death or Disability, or
(c) by the Executive without Good Reason, (any such
employment termination being hereafter sometimes referred to as a "
Compensable Termination "), then the Company shall pay the
Executive the amounts, and provide the Executive the benefits,
described in this Section 6.1 (" Severance Payments "), in
addition to any payments and benefits to which the Executive is
entitled under Sections 5 and 6.3 hereof. Notwithstanding the
foregoing, the Executive shall not be eligible to receive any
payment or benefit provided for in this Section 6.1 unless the
Executive shall have executed a release substantially in the form
of Exhibit A hereto effective as of the date of the Compensable
Termination or a date subsequent thereto and shall not have revoked
said release. The Severance Payments are in lieu of any
severance benefits that would otherwise be payable or provided
pursuant to any severance plan or practice of the Company:
(i) The
Company shall pay the Executive, at the time provided in Section
6.2 below, a lump sum cash payment equal to either:
(a) if the
termination set forth in section 6.1 occurs after May 31,
2010: two and a half (2.5) times the
Executive’s bonus that was paid (or that is payable) with
respect to the fiscal year of the Company preceding the fiscal year
of the Company in which the Compensable Termination occurs; or
(b) if the
termination set forth in section 6.1 occurs prior to May 31, 2010:
two and a half (2.5) times the Executive’s target bonus
(which target bonus is 70% of the Executive’s salary).
(ii) The Company
shall pay the Executive, at the time provided in Section 6.2 below,
a lump sum cash payment equal to two and a half (2.5) times the
Executive's annual base salary at the rate in effect immediately
prior to the Compensable Termination or, if higher, in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason (“ Base Salary
”).
(iii) The Company will pay the Executive for all earned
but unused vacation leave at the time of the Compensable
Termination.
(iv) The
Company will continue to provide the Executive with Medical,
Dental, Prescription, & Vision insurance coverage until the
earlier of (A) the second anniversary of the date of his
Compensable Termination or (B) the
date on which the Executive accepts an offer
of employment that provides similar insurance coverage. Coverage
shall be on the same terms and conditions as apply to full-time
employees of the Company.
6.2
All payments to be made pursuant to subsection (i),
(ii), (iii) and (iv) of Section 6.1 above shall be made within
thirty (30) calendar days after the date on which a Separation
from Service occurs coincident with or following, or within 30 days
before, the date on which the Compensable Termination occurs (the
“ Separation from Service Date ”) unless
on the Separation from Service Date the Executive is a
Specified Employee, in which case such payments shall be made six
months and one day after the Separation from Service Date (or, if
earlier, the date of the Executive’s death).
For purposes of the preceding sentence, a Specified
Employee means a “specified employee” who is
subject to the special rule set forth in subsection (a)(2)(B)(i) of
section 409A of the Code and the regulations thereunder (including,
without limitation, Proposed Treasury Regulation section
1.409A-1(i)) with respect to such payments.
6.3 (A) Notwithstanding
any provision of this Agreement to the contrary, in the event that
any payment or benefit received or to be received by the Executive
in connection with a Change in Control or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Company, any Person whose actions result in a Change in Control or
any Person affiliated with the Company or such Person) (all such
payments and benefits, including the Severance Payments but
excluding any payment to be made pursuant to this subsection
6.3(A), being hereinafter called " Total Payments ") would
be subject (in whole or part) to the Excise Tax, then the cash
Severance Payments shall first be reduced, and the other payments
and benefits hereunder shall thereafter be reduced, to the extent
necessary so that no portion of the Total Payments will be subject
to the Excise Tax, but only if (i) is greater than or equal to
(ii), where (i) equals the reduced amount of such Total Payments
minus the aggregate amount of federal, state and local income taxes
on such reduced Total Payments and (ii) equals the unreduced amount
of such Total Payments minus the sum of (a) the aggregate amount of
federal, state and local income taxes on such Total Payments and
(b) the amount of Excise Tax to which the Executive would be
subject in respect of such unreduced Total Payments; provided,
however, that the Executive may elect to have the other payments
and benefits hereunder reduced (or eliminated) prior to any
reduction of the cash Severance Payments. However, if the Executive
would realize at least $50,000 more after taxes from the Total
Payments if the Company were to “gross up” the Excise
Tax on the Total Payments rather than apply the preceding sentence,
then the preceding sentence shall be disregarded and the Company
shall instead pay the Executive an amount of money that would be
sufficient to pay the Excise Tax on the Total Payments. Whether the
Executive would realize at least $50,000 more after taxes if he
were grossed up, and the amount of the gross up to be paid, shall
be determined by assuming (whether or not such is in fact the case)
that the Executive is subject to federal income taxation at the
highest marginal rate of federal income tax and to state and local
income taxation at the highest marginal rates of state and local
income taxes in the state and locality of the Executive’s
residence on the date on which the Change in Control occurs or
at the time provided in Section 6.2
above (whichever is the date as of which the determination
in question is made in accordance with the next sentence of this
paragraph); provided that in no event shall the Executive’s
marginal tax rate
including the Excise Tax be assumed to exceed seventy percent
(70%) for purposes of calculating the amount of gross up to be
paid. The amount of money payable to the Executive pursuant to the
two preceding sentences, if any, shall be determined as of the date
on which a Change in Control occurs and shall be paid within ten
(10) calendar days after the date on which occurs “a
change in the ownership or effective control of the corporation, or
in the ownership of a substantial portion of the assets of the
corporation” within the meaning of section 409A(a)(2)(A)(v)
of the Code (whether occurring at the same time as or after the
date on which a Change in Control occurs); and if a Compensable
Termination occurs after the date on which a Change in Control
occurs, the amount of money payable to the Executive pursuant to
the two preceding sentences, if any, shall be re-determined as of
the date of the Compensable Termination and any balance due the
Executive shall be paid at the time provided in Section 6.2
above.
(B) For purposes of determining whether and the
extent to which the Total Payments will be subject to the Excise
Tax, (i) no portion of the Total Payments the receipt or enjoyment
of which the Executive shall have waived at such time and in such
manner as not to constitute a "payment" within the meaning of
section 280G(b) of the Code shall be taken into account, (ii) no
portion of the Total Payments shall be taken into account which, in
the opinion of the accounting firm which was,
immediately prior to the Change in Control, the Company's
independent auditor (the " Auditor "), does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the
Code (including, without limitation, by reason of section
280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no
portion of such Total Payments shall be taken into account which,
in the opinion of the Auditor, constitutes reasonable compensation
for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the Base Amount allocable
to such reasonable compensation, and (iii) the value of any
non-cash benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. In
the event that the Auditor is serving as accountant or auditor for
the individual, entity or group effecting the “change in
ownership or effective control” or “change in the
ownership of a substantial portion of the assets” (within the
meaning of Code section 280G(b)(2)(A)) that gives rise to the
Excise Tax, or in the event that the Auditor for any reason is
unable or unwilling to make the determinations required hereunder,
the Executive shall designate another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Auditor
hereunder). All fees and expenses of the Auditor shall
be borne solely by the Company.
(C) At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written
statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received
from the Auditor or other advisors or consultants (and any such
opinions or